Rushing at the chance to stay put

Kath Dolan
March 10, 2012

Established areas such as South Yarra tend to have quite a few long-term renters.

Ongoing tenancies aren't as rare as you may think, even in the inner city.

In an era of rent rises and with an ever-shrinking pool of affordable housing, it's heartening that opportunities for long-term rentals, even in sought-after inner-city suburbs such as St Kilda and Prahran, haven't dried up completely.

It's tricky to pinpoint how many Victorians have long-term leases but a 2009 study of housing mobility by the Australian Bureau of Statistics provides clues. The study found that in 2007-08, ''only 15 per cent of private renters had spent more than five years in their current dwelling, with 58 per cent having spent less than two years. This is, in part, a reflection of the generally younger age of private renters, who may move for study, employment or relationship reasons.''

Windsor real estate agent Rae Tolley says that while newer suburbs might have few long-term rentals on their books, older, established areas such as hers (which spans St Kilda, St Kilda East, Windsor, Prahran, Caulfield and parts of South Yarra) have plenty.

Ms Tolley, the manager of Beller Real Estate's property management department, says that of Beller's 2500-odd rental properties, 45 per cent are on leases of up to two years, 30 per cent are on leases up to six years and 20 per cent are on leases of seven years or more. Some tenants have been in the same house since the early 1980s.

''Most leases just start out with a 12-month term and go on from there,'' she says. ''There are very few people that would say upfront that they intend on staying in that property for five, six, seven years. It's just how it turns out.''

Many long-term tenants are older people (aged 60 and over) but there are others, too: those who can't afford or don't want to buy; former home owners awaiting a change in the market before buying again; students and others who have left home; and people who have separated. ''There's certainly a cross-section, for every reason you could imagine,'' Ms Tolley says.

Successful relationships between landlords and long-term tenants offer mutual security, she says. Rent rises are often smaller and less frequent than for properties re-leased annually.

''Usually on the longer-term tenancies, the owners aren't that ambitious as far as the rents go,'' Ms Tolley says. ''They definitely want rent increases but sometimes they're happy to keep them slightly under market. Owners see it as an advantage to have someone in their property for a reasonable term because there's no vacancy period and no leasing fees, so the costs to owners are less. We find with long-term tenants the wear and tear on a property is definitely less and the maintenance requests are less, so it's definitely an advantage. I don't think any owner wants to turn tenants over every 12 months.''

Landlords tend to be more receptive to requests for improvements on properties well cared for by long-term tenants. ''If there's a financial difficulty … a long-term tenant will have a better chance of the owner being prepared to carry them for a little while rather than someone who's just moved in to a property,'' Ms Tolley says.

But the arrangement won't suit everyone. ''Some owners aren't that interested in building relationships; it's more about getting the best possible rent on a property.''